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Hostess To Liquidate And Close Bakeries

Sophie Elkus |
November 21, 2012 | 2:49 p.m. PST

Executive Producer

Hostess Brands will liquidate immediately. (Creative Commons)
Hostess Brands will liquidate immediately. (Creative Commons)
Hostess Brands Inc., the famed maker of the Twinkie, announced Wednesday that it obtained court permission to wind down all operations immediately, the Wall Street Journal reported.

The closure will include 33 bakeries, 565 distribution centers, about 5,500 delivery routes, and 570 outlet stores. It also includes the loss of 18,500 jobs.

The company received court authority from the U.S. Bankruptcy Court for the Southern District of New York after it was unable to reach an agreement with the Bakery, Confectionary, Tobacco and Grain Millers Union (BCTGM).

The closing of Hostess Brands follows a nationwide strike started by the BCTGM on November 9th that damaged its operations during an already financially unstable time. It also suffered an “inflated cost structure that put the company at a profound competitive disadvantage,” the Wall Street Journal reported.

Hostess will return its excess ingredients and packaging and implement a non-executive employee plan to make sure it has enough employees on hand to implement the wind down. Approximately 3,200 employees will be kept.

Despite the company’s 18-month effort to reorganize and negotiate with key constituents towards a cost-effective business plan, BCTGM’s campaign to cripple Hostess operations forced it to liquidate.

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